Clarifying a quality formula
Thank you for your coverage of the groundbreaking hospital quality demonstration project announced July 10 by the Centers for Medicare and Medicaid Services ("Experimenting with quality," July 14, p. 6). Premier is proud to be involved with the first major initiative that rewards hospitals based on objective quality measures.
The formula for rewarding hospitals has occasionally been misunderstood. In all three years of the project, hospitals that perform in the top 20% on the quality measures for each clinical condition will receive increased payment from Medicare, as well as public recognition.
We would like to clarify the third-year incentives that are part of the agreement between the CMS and Premier. In the third year, any participant that performs below a fixed baseline--established in year one--would face a small reduction in Medicare payment. The baseline will be defined by the performance of the lowest 20% of hospitals within a clinical condition in the first year of the project.
It is our belief that hospitals are unlikely to experience such a situation. Every hospital in the demonstration has three years to move its performance above the year one baseline.
How does this fit within the budget-neutral mandate of Medicare? As hospitals improve their clinical outcomes, they reduce rehospitalizations, complications and utilization. This saves Medicare money. More importantly, it improves patient care and saves lives.
Innovative hospitals and healthcare systems such as Kettering Medical Center Network in Dayton, Ohio, and Aurora Health Care in Milwaukee immediately recognized that this is a historic opportunity. They have committed to participate. We anticipate other organizations will agree to join the project very soon. We look forward to your continued reporting on this important initiative.
Senior vice president and general manager
Working within flawed system
Mary Chris Jaklevic's cover story "It's more than just Tenet" (July 14, p. 4) does a great disservice to a number of New Jersey hospitals. Using inference, implication and a misleading headline to compare a host of New Jersey hospitals and others nationwide with Tenet Healthcare Corp.'s Medicare outlier improprieties in California is both inaccurate and inappropriate.
What appeared in print, including direct and indirect quotes from the New Jersey Hospital Association's senior vice president of health economics, gave the impression that the NJHA acknowledged that some New Jersey hospitals may have tried to improve bottom lines by accelerating Medicare outlier payments. This was never said.
What we did tell the reporter was that hospitals in New Jersey are operating within the allowable framework of the Medicare reimbursement system and that the confusion over charges and outliers was just another symptom of a payment system that was broken and needed to be fixed.
Frankly, it seems that both your reporter and story editor entered into this assignment with an agenda and only used fact and commentary that fit that agenda.
For some time I've heard others questioning the veracity of Modern Healthcare's reporting. I've never found that to be the case until now. Given this most recent experience, our organization is beginning to wonder about your magazine's commitment to balance and fairness.
President and chief executive officer
New Jersey Hospital Association
ANA's overtime gambit
I laughed out loud while reading the article on registered nurses and overtime ("Overtime threat," July 7, p. 10). Leave it to the American Nurses Association to try to needlessly scare its members (and prospective members) with the "threat" of losing overtime pay as a result of the U.S. Labor Department's proposed changes in the Fair Labor Standards Act's overtime provisions.
As any healthcare human resources professional could tell you, every hospital registered nurse in the country could be salaried under the current law's professional provision for exemption from overtime.
Employers have voluntarily chosen to treat RNs as nonexempt and pay them overtime because it's the right thing to do given the nature of their work.
The proposed regulation changes nothing in this regard.
Even more humorous is the comment from Tammy McCutchen, administrator of the Labor Department's wage and hour division, who said, "Collective bargaining will help." If RNs are getting overtime from an employer now, taking that topic to the bargaining table can only expose that payment to the risk of reduction or elimination. (There's an old negotiating adage: "Don't discuss what you already have and want to keep.")
I doubt there is a hospital or healthcare system that is seriously considering making its staff nurses exempt. That would be an employee relations mistake of the highest order, and the ANA undoubtedly knows that.
But then, if you are a union like the ANA, you have to continuously prove your value to your dues-paying members in some fairly far-fetched ways.
Vice president of human resources
Clarifying Blues coverage
Laura Benko's reference to Kansas in an article on Blue Cross and Blue Shield conversions ("They've got the Blues," July 14, p. 18) was not quite accurate.
The article indicated that then-Insurance Commissioner Kathleen Sebelius rejected our request to convert to for-profit status as part of a proposed sale to Indianapolis-based Anthem. You go on to say that the insurers appealed to the state Supreme Court in March 2003, arguing that Sebelius had overstepped her authority.
Contrary to your reporting, Sebelius cited no problems with Kansas Blue Cross and Blue Shield changing to a stock company. She did, however, reject the sale of that stock to Anthem. Because the two actions were linked legally, the first action was negated when the second failed.
Secondly, the Blues did not appeal the case to the state Supreme Court, as you reported. We appealed the commissioner's decision to the Shawnee County District Court, where the judge ordered Sebelius to write a new order, as her initial one didn't meet the requirements of the law.
It was Sebelius, not us, who appealed the district court's decision to the Kansas Supreme Court.
Director of communications and public relations
Blue Cross and Blue Shield of Kansas
Wanted: technical skills, speed
I read with interest your editorial on the looming workforce shortage ("The vanishing workforce," June 16, p. 20). I think another confounding factor here that has been somewhat overlooked is the technical nature of many hospital jobs and the speed at which a new employee is expected to learn the needed skills and information.
I have worked in hospital pharmacies for more than 30 years. Pharmacy technicians are an integral part of our operation. When I started these positions were filled by high school graduates who were trained on the job. With computerization, automated dispensing, bar coding and unit-dose repackaging, the level of knowledge and expertise required for the job has grown exponentially.
With all of the financial constraints in hospitals, how can we expect new employees to achieve a comfort level in their job in the time we need them to be pulling their own weight?
We need to evaluate just what kind of product we want to provide and make sure that we have properly trained staff to provide it, otherwise those who do venture into healthcare might just stay a while longer.
Director of pharmaceutical services
North Country Health System
A model for tort reform
Regarding your story, "Keeping the cap" (June 23, p. 25), Maxwell Mehlman's plea that "flat caps on (jury) awards are unfair" may be driven as much by a worry about lawyers' recoveries in malpractice actions as by a concern for injured patients.
In Colorado we have a system enacted by the state Legislature that caps recoveries in a way to have produced nearly 20 years of a stable malpractice insurance market, without unreasonable limits on the ability of injured parties to receive just and adequate compensation.
The law does this by:
* Limiting total compensation per event to $1 million, inclusive of a cap on noneco-nomic loss at $300,000.
* Allowing a court to exceed the cap on economic loss if future wage loss and/or healthcare costs are too high.
* Relegating punitive damage claims to those in which the court deems that truly egregious and willful/wanton conduct is found, reducing the ability of lawyers to drive settlements based on the threat of such a verdict.
* Instituting a reasonable statute of limitation to reduce uncertainty in the liability insurance business.
* Imposing strict qualifications for expert witnesses in malpractice actions, eliminating the prospect of experts-for-hire of earlier days.
* Apportionment of damages in relation to percent of negligence, making the "deep pockets" theory irrelevant in allocating payments of awards.
K. Mason Howard
I've just read the article on participatory bonds in your May 12 issue ("Isn't that special," p. 4). I was wondering if Lafayette (La.) General Medical Center was successful in issuing the bonds and/or if there have been any compliance challenges as a result.
Geisinger Health System
Editor's note: Lafayette General has decided against financing its new heart hospital through the sale of tax-exempt bonds to physicians, citing pending federal legislation outlawing the tactic (See "No bonds for new La. hospital," July 7, p. 3).
Bar codes and bucks
In his letter to the editor, "Bar coding and fiscal reality" (July 7, p. 22), Lewis Hughes writes of your cover story ("Scanning for higher profits," June 16,p. 6) that "all of us in healthcare administration would love to purchase all of these high-tech systems ... but without a windfall of dollars, the money just isn?t there."
The truth is the money will never be there unless these systems are used. As project manager for our bar-code initiative at 45-bed Waldo County General Hospital in Belfast, Maine, I have seen the effect a bar-coding system can have.
Our director of support services decided we needed to implement a bar-coding system for materials management, and with the backing of the chief executive officer and the board of directors, the dollars were found to do so.
We started with bar-coding supplies in the operating room. Once the system was in place, we recovered more than $10,000 in lost charges in a nine-day period. Since then we have recovered from $200 to $2,700 per day, and that?s only in the OR. We are now adopting this technology throughout the facility. By streamlining our materials management system, we have increased efficiency and have not had to replace employees who leave. The money we recover from lost charges in the supply system will allow us to do other things with the system, i.e., patient safety and efficiency.
It is our opinion that any hospital regardless of size cannot afford not to find the money for a bar-code system.
Waldo County General Hospital
What do you think?
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